In a number of recent posts I have focused on issues concerning law school grades. Specifically, I have discussed how law professors write exams, how to improve your law school grades, and how Justice Harry Blackmun's law school transcript was littered with Cs and Ds (shocking but reassuring).
Also on the topic of law school grades (especially IL grades)--what they mean, and more importantly what they don't mean--there's a good post on the Volokh Conspiracy by Professor Orin Kerr at George Washington Unversity Law School. I recommend it strongly. Among other things, Kerr urges distraught students to keep things in perspective and not to assume that "bad grade" = "I am dumb." That's critically important advice.